On August 1, 2024, the Department of Justice (DOJ) Criminal Division introduced the Corporate Criminal Forfeiture Whistleblower Pilot Program. This initiative is designed to encourage individuals to provide original information about specific types of corporate criminal misconduct. The goals are to deter criminal activities, confiscate illicit proceeds, and compensate victims.

This new program aims to fill gaps in existing enforcement mechanisms under other whistleblower programs, such as those of the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Financial Crimes Enforcement Network. It also complements qui tam actions under the False Claims Act. Deputy Attorney General Lisa Monaco highlighted that while existing programs are invaluable, they don’t cover all corporate and financial misconduct the DOJ prosecutes. “That’s why I asked the leaders at the Criminal Division to design a program that would fill the gaps in this patchwork,” she said.

According to the DOJ’s guidelines, whistleblowers can receive awards if they provide original information leading to criminal or civil forfeiture exceeding $1,000,000 in net proceeds from successful prosecution, corporate criminal resolution, or civil forfeiture action related to corporate criminal conduct in four key areas:

Violations by financial institutions: This includes schemes involving money laundering, anti-money laundering compliance violations, registration of money transmitting businesses, and fraud statutes, as well as fraud against or non-compliance with financial institution regulators.

Foreign corruption and bribery: Violations by, through, or related to companies, including those of the Foreign Corrupt Practices Act, the Foreign Extortion Prevention Act, and money laundering statutes.

Domestic bribery and kickbacks: Payments to domestic public officials, including federal, state, territorial, or local officials and employees of any government department or agency.

Healthcare-related offenses: Federal healthcare offenses and related crimes involving private or non-public healthcare benefit programs, fraud against patients, investors, and other non-governmental entities, and any other federal violations involving healthcare not covered by the Federal False Claims Act.

“Original information” is defined as independent knowledge or analysis that adds materially to what the government already knows. Whistleblowers are ineligible for awards if they qualify under another program, are DOJ employees or their family members, participated in the misconduct, or were employed in an audit capacity.

Awards are at the DOJ’s discretion, with a presumption for the maximum 30% award on the first $10 million recovered when no aggravating factors are present. Whistleblowers can receive up to 30% of up to $100 million, up to 5% of recoveries between $100 million and $500 million, and no percentage above $500 million. Priority is given to compensating owners, lienholders, and individual victims before awarding whistleblowers.

The DOJ considers several factors when determining award amounts, such as the significance of the information, the whistleblower’s assistance and timeliness, and their participation in internal compliance programs. Factors reducing the award include the whistleblower’s involvement in the misconduct, delay in reporting, interference with compliance programs, and a managerial role overseeing the conduct.

Confidentiality for whistleblowers is not guaranteed but will be protected as much as possible. Whistleblowers can report anonymously through an attorney and are expected to cooperate with DOJ investigations, including possible grand jury or trial testimony. Retaliation against whistleblowers will be considered when assessing an entity’s cooperation credit or individual culpability.

To receive an award, whistleblowers must submit tips through the DOJ website. Similar to other financial fraud programs, the DOJ will publish information about successful corporate criminal forfeitures, and whistleblowers can file a claim within 90 days if they believe their tip contributed to the success. The DOJ’s award decisions are final and not subject to appeal.

This pilot program, set to run for three years, is open to stakeholder feedback and improvements. As seen with other whistleblower programs and the False Claims Act, a guaranteed minimum award is a powerful incentive for individuals to report significant frauds. The TAF Coalition will continue to monitor and report on the program’s developments.